[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1655 Introduced in House (IH)]

114th CONGRESS
  1st Session
                                H. R. 1655

  To amend the Community Services Block Grant Act to reauthorize and 
                           modernize the Act.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 26, 2015

 Mr. Fitzpatrick (for himself, Ms. McCollum, Mr. Goodlatte, Mr. Costa, 
 Mr. Hanna, Mr. Thompson of Pennsylvania, Mr. Dent, and Mr. Barletta) 
 introduced the following bill; which was referred to the Committee on 
                      Education and the Workforce

_______________________________________________________________________

                                 A BILL


 
  To amend the Community Services Block Grant Act to reauthorize and 
                           modernize the Act.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Community Economic Opportunity Act 
of 2015''.

SEC. 2. PREAUTHORIZATION.

    The Community Services Block Grant Act (42 U.S.C. 9901 et seq.) is 
amended to read as follows:

          ``Subtitle B--Community Services Block Grant Program

``SEC. 671. SHORT TITLE.

    ``This subtitle may be cited as the `Community Services Block Grant 
Act'.

``SEC. 672. PURPOSES.

    ``The purposes of this subtitle are--
            ``(1) to reduce poverty in United States communities by 
        supporting the activities of community action agencies that 
        reduce the causes and conditions of poverty and persistent 
        economic insecurity by--
                    ``(A) providing individuals and families with 
                opportunities to become economically secure; and
                    ``(B) developing new economic opportunities in the 
                communities in which low- and moderate-income 
                individuals live; and
            ``(2) to accomplish the objectives described in paragraph 
        (1) by--
                    ``(A) strengthening community capabilities for 
                identifying poverty conditions and opportunities to 
                alleviate such conditions and planning Federal, State, 
                local, and other assistance, including private 
                resources, related to the reduction of poverty so that 
                resources can be used in a manner responsive to local 
                needs and conditions;
                    ``(B) organizing and coordinating multiple services 
                and resources so as to have a measurable and 
                significant impact on the causes of poverty in the 
                community and to help families and individuals find and 
                utilize opportunities to become economically secure;
                    ``(C) using innovative community-based approaches 
                to attack the causes and effects of poverty and to 
                build community social and economic assets;
                    ``(D) empowering residents to respond to the unique 
                problems and needs within their communities through 
                civic participation and partnerships;
                    ``(E) broadening the sources and number of 
                resources directed to the elimination of poverty, so as 
                to promote statewide, regional, and local partnerships 
                that--
                            ``(i) achieve the purposes of this 
                        subtitle; and
                            ``(ii) include--
                                    ``(I) private, religious, 
                                charitable, and neighborhood-based 
                                organizations;
                                    ``(II) individuals, businesses, 
                                labor organizations, professional 
                                organizations, and other organizations 
                                engaged in expanding opportunities for 
                                all individuals; and
                                    ``(III) local government leaders; 
                                and
                    ``(F) ensuring the maximum feasible participation 
                of residents of low-income communities and of members 
                of the groups served by programs, projects, and 
                services under this subtitle, in advising and assessing 
                the eligible entities and in designing their programs, 
                projects, and services funded under this subtitle.

``SEC. 673. DEFINITIONS.

    ``In this subtitle:
            ``(1) Community action agency; community services network 
        organization; eligible entity.--
                    ``(A) Community action agency.--The term `community 
                action agency' means an eligible entity (which meets 
                the requirements of paragraph (1) or (2), as 
                appropriate, of section 681(c)) that is a public 
                charity and that delivers multiple programs, projects, 
                or services to a variety of low-income groups.
                    ``(B) Community services network organization.--The 
                term `community services network organization' means 
                any of the following organizations funded under this 
                subtitle--
                            ``(i) a grantee;
                            ``(ii) an eligible entity;
                            ``(iii) an association of grantees or 
                        eligible entities; or
                            ``(iv) an association--
                                    ``(I) with a membership composed of 
                                grantees, eligible entities, or 
                                associations of grantees or eligible 
                                entities; and
                                    ``(II) that is governed by a Board 
                                of Directors composed so that \3/4\ of 
                                the Directors are employees or 
                                designees of such grantees, such 
                                eligible entities, or such 
                                associations, or are employees or other 
                                designees of such grantees such 
                                eligible entities, or such 
                                associations.
                    ``(C) Eligible entity.--The term `eligible entity' 
                means an entity--
                            ``(i) that is an eligible entity described 
                        in section 673(1) as in effect on October 26, 
                        1998, or has been designated by the process 
                        described in section 681(a) (including an 
                        organization serving migrant or seasonal 
                        farmworkers that is so described or 
                        designated); and
                            ``(ii) that has a tripartite board or other 
                        mechanism described in paragraph (1) or (2), as 
                        appropriate, of section 681(c).
            ``(2) Community action program plan.--community action 
        program plan means a detailed plan, including a budget, for 
        expenditures of funds appropriated for a fiscal year under this 
        subtitle for the activities supported directly or indirectly by 
        such funds.
            ``(3) Community action strategic plan.--The term `community 
        action strategic plan' means a plan that is adopted as the 
        policy of an eligible entity and that--
                    ``(A) establishes goals for a period of not less 
                than 4 years that are based on meeting needs identified 
                by the entity in consultation with the residents of the 
                community through a process of comprehensive community 
                needs assessment;
                    ``(B) provides detail on how all activities of an 
                eligible entity under this subtitle will contribute to 
                meeting such goals including, but not limited to, how 
                such entity will use funding received under this 
                subtitle to reduce the impact of the causes of poverty 
                in the community; and
                    ``(C) specifies how such activities will be 
                managed, funded, and measured by the performance 
                measurement system of such entity.
            ``(4) Grantee.--The term `grantee' means a recipient of a 
        grant under section 677 or 678 or a corresponding provision of 
        this subtitle (as in effect on the day before the date of 
        enactment of the Community Economic Opportunity Act of 2015).
            ``(5) Performance benchmark.--The term `performance 
        benchmark' means a measurable objective for the operations and 
        activities set out in a community action program plan or a 
        State plan under this subtitle. Such annual objectives may be 
        part of, but not the entirety of, the outcomes identified by 
        the performance measurement system in which a community 
        services network organization participates.
            ``(6) Performance measurement system.--The term 
        `performance measurement system' means a management information 
        system that collects and reports information about the outcomes 
        of activities and investments funded in whole or in part with 
        funds appropriated under this subtitle, including but not 
        limited to annual performance benchmarks, compares the actual 
        outcomes with the intended outcomes, and is used as a basis for 
        management decisions regarding future use of resources provided 
        under this subtitle.
            ``(7) Poverty line.--
                    ``(A) In general.--The term `poverty line' means 
                the official poverty line defined by the Office of 
                Management and Budget, based on the most recent data 
                available from the Bureau of the Census, subject to 
                subparagraphs (C) and (D). The Secretary shall revise 
                the poverty line annually (or at any shorter interval 
                the Secretary determines to be feasible and desirable). 
                The required revision shall be accomplished by 
                multiplying the official poverty line by the percentage 
                change in the Consumer Price Index for All Urban 
                Consumers during the annual or other interval 
                immediately preceding the time at which the revision is 
                made.
                    ``(B) Community services block grant eligibility 
                criterion.--Subject to subparagraphs (C), (D), and (E), 
                the poverty line, as defined in subparagraph (A), shall 
                be used as a criterion of eligibility for services or 
                assistance provided to individuals or families through 
                the community services block grant program established 
                under this subtitle.
                    ``(C) State revision of poverty line.--Whenever a 
                State determines that it serves the objectives of the 
                block grant program established under this subtitle, 
                the State may rewrite the poverty line not to exceed 
                125 percent of the official poverty line otherwise 
                applicable under subparagraph (A).
                    ``(D) Waivers for state use of higher eligibility 
                level.--Whenever a community action program plan 
                provides that a program, project, or service funded 
                under this subtitle requires use of a higher 
                eligibility standard than the standard otherwise 
                applicable under this paragraph, for the purpose of 
                ensuring (for the purposes of this subtitle) 
                coordination of activities carried out under with other 
                programs or activities of eligible entities. The State 
                shall, as part of the annual application described in 
                section 680, apply such standard with respect to that 
                program, or activity and provide documentation 
                regarding the benefit of and need for such adjustment.
                    ``(E) Procedures for continued eligibility.--A 
                State may establish procedures to ensure that a 
                participant in a program, project, or service funded 
                under this subtitle remains eligible to participate as 
                long as the participant is successfully progressing 
                towards achievement of the goals of the program, 
                project, or service, regardless of any income 
                eligibility criteria.
            ``(8) Private, nonprofit organization.--The term `private 
        nonprofit organization' includes a religious organization to 
        which the provisions of section 690 shall apply.
            ``(9) Public charity.--The term `public charity' means a 
        domestic organization that is--
                    ``(A) described in section 501(c)(3) of the 
                Internal Revenue Code of 1986 and exempt from taxation 
                under section 501(a) of such Code; and
                    ``(B) described in paragraph (1) or (2) of section 
                509(a) of the Internal Revenue Code of 1986.
            ``(10) Secretary.--The term `Secretary' means the Secretary 
        of Health and Human Services.
            ``(11) Service area.--The term service area means the 
        unique geographic area which the State has designated as the 
        area to be served by an eligible entity.
            ``(12) State.--The term `State' means any of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, Guam, the United States Virgin Islands, American Samoa, 
        or the Commonwealth of the Northern Mariana Islands.

``SEC. 676. ESTABLISHMENT OF COMMUNITY SERVICES BLOCK GRANT PROGRAM.

    ``(a) Establishment of Program.--The Secretary is authorized to 
establish a community services block grant program and to make grants 
through the program, under sections 677 and 678 to States to support 
local community action program plans carried out by eligible entities 
to ameliorate the conditions that cause poverty in the communities 
served by such entities.
    ``(b) Authority of Secretary.--The Secretary is authorized to carry 
out other community programs described in section 693 of this subtitle.
    ``(c) Uniform Administrative Requirements; Cost Principles and 
Audit Requirements.--Notwithstanding any other provision of the Omnibus 
Budget Reconciliation Act of 1981 (Public Law 97-35), funds authorized 
to be appropriated under this subtitle shall be subject to the Uniform 
Administrative Requirements, Cost Principles and Audit Requirements for 
Federal Awards as adopted in regulations promulgated by the Secretary 
to implement the Uniform Administrative Requirements Cost Principles 
and Audit Requirements at part 200, title 2, code of Federal 
Regulations or any corresponding similar regulation (part 75 of title 
45, Code of Federal Regulations or any corresponding similar 
regulation), as well as all other Federal laws and regulations related 
to intergovernmental financial transactions and to administration of 
federally funded grants and cooperative agreements between States and 
nonprofit organizations, or local governments, as applicable.

``SEC. 677. GRANTS TO TERRITORIES.

    ``(a) Apportionment.--The Secretary shall apportion the amount 
reserved under section 692(c)(1) for each fiscal year on the basis of 
need to eligible jurisdictions, among Guam, American Samoa, the United 
States Virgin Islands, and the Commonwealth of the Northern Mariana 
Islands.
    ``(b) Grants.--The Secretary shall make a grant to each eligible 
jurisdiction to which subsection (a) applies for the amount apportioned 
under subsection (a).

``SEC. 678. ALLOTMENTS AND GRANTS TO STATES.

    ``(a) Allotments in General.--From the amount appropriated under 
section 692(a) for each fiscal year and remaining after the Secretary 
makes the reservations required by section 692(c), the Secretary shall 
allot to each eligible State (subject to section 679), an amount that 
bears the same ratio to such remaining amount as the amount received by 
the State for fiscal year 1981 under section 221 of the Economic 
Opportunity Act of 1964 bore to the total amount received by all States 
for fiscal year 1981 under such section, except as provided in 
subsection (b).
    ``(b) Minimum Allotments.--
            ``(1) In general.--The Secretary shall allot to each State 
        not less than \1/2\ of 1 percent of the amount appropriated 
        under section 692(a) for such fiscal year except as provided in 
        section 692(c)(1).
            ``(2) Years with greater available funds.--If the amount 
        appropriated under section 692(a) for a fiscal year and 
        remaining after the Secretary makes the reservations required 
        by section 692(b) exceeds $850,000,000, no State shall receive 
        under this section less than \3/4\ of 1 percent of the 
        remaining amount.
    ``(c) Grants and Payments.--Subject to section 679, the Secretary 
shall make grants to eligible States for the allotments described in 
subsections (a) and (b). The Secretary shall make payments for the 
grants in accordance with section 6503(a) of title 31, United States 
Code.
    ``(d) Definition.--In this section, the term `State' does not 
include Guam, American Samoa, the United States Virgin Islands, and the 
Commonwealth of the Northern Mariana Islands.

``SEC. 679. PAYMENTS TO INDIAN TRIBES.

    ``(a) Definitions.--In this section:
            ``(1) Indian.--The term `Indian' means a member of an 
        Indian tribe or of a tribal organization.
            ``(2) Indian tribe; tribal organization.--The terms `Indian 
        tribe' and `tribal organization' mean a tribe, band, or other 
        organized group recognized in the State in which the tribe, 
        band, or group resides, or considered by the Secretary of the 
        Interior, to be an Indian tribe or an Indian organization for 
        any purpose.
    ``(b) Reservation.--
            ``(1) Application.--Paragraph (2) shall apply only if, with 
        respect to any State, the Secretary--
                    ``(A) receives a request from the governing body of 
                an Indian tribe or tribal organization within such 
                State that assistance under this subtitle be made 
                available directly to such tribe or organization; and
                    ``(B) determines that the members of such Indian 
                tribe or tribal organization would be better served by 
                means of grants made directly to such tribe or 
                organization to provide benefits under this subtitle.
            ``(2) Amount.--The Secretary shall reserve from amounts 
        allotted to a State under section 678 for a fiscal year, not 
        less than the amount that bears the same ratio to the State 
        allotment for the fiscal year as the population of all eligible 
        Indians for whom a determination has been made under paragraph 
        (1)(B) bears to the population of all individuals eligible for 
        assistance through a grant made under section 678 to such 
        State.
    ``(c) Awards.--The amount reserved by the Secretary on the basis of 
a determination made under subsection (b)(1)(B) shall be made available 
by grant to the Indian tribe or tribal organization serving the Indians 
for whom the determination has been made under subsection (b)(1)(B).
    ``(d) Plan.--In order for an Indian tribe or tribal organization to 
be eligible for a grant award for a fiscal year under this section, the 
tribe or organization shall submit to the Secretary a plan for such 
fiscal year that meets such criteria as the Secretary may prescribe by 
regulation.
    ``(e) Alternative Performance Measurement System.--The Secretary 
may promulgate alternative requirements for tribal implementation of 
the requirements of section 680(c).

``SEC. 680. STATE PLANS AND APPLICATIONS; COMMUNITY ACTION PROGRAM 
              PLANS AND APPLICATIONS.

    ``(a) State Lead Agency.--
            ``(1) Designation.--The chief executive officer of a State 
        desiring to receive a grant under section 677 or 678 shall 
        designate, in an application submitted to the Secretary under 
        subsection (b), an appropriate State agency that agrees to 
        comply with the requirements of paragraph (2), to act as a lead 
        agency for purposes of carrying out State activities under this 
        subtitle.
            ``(2) Duties of lead state agencies.--The lead agency 
        shall--
                    ``(A) be authorized by the chief executive officer 
                to convene State agencies and coordinate--
                            ``(i) information and activities funded 
                        under this subtitle; and
                            ``(ii) information and activities of any 
                        State agencies whose State programs are 
                        intended to reduce poverty, including agencies 
                        administering resources that support 
                        development of jobs and housing in communities;
                    ``(B) develop the State plan to be submitted to the 
                Secretary under subsection (b), which shall be based 
                primarily on the community action program plans of 
                eligible entities, submitted to the State as a 
                condition of receiving funding under this subtitle for 
                approval by the State;
                    ``(C) assist eligible entities--
                            ``(i) in conducting periodic comprehensive 
                        community needs assessments, not less often 
                        than every 4 years;
                            ``(ii) in developing community action 
                        program plans; and
                            ``(iii) in developing community action 
                        strategic plans;
                    ``(D) coordinate plans for the activities of the 
                State and other organizations under this subtitle, and 
                activities of recipients of training or technical 
                assistance with the community action program plans;
                    ``(E) in conjunction with the development of the 
                State plan as required under subsection (b)--
                            ``(i) hold at least one hearing in the 
                        State on the proposed plan, to provide to the 
                        public an opportunity to comment on the public 
                        record on the proposed use and distribution of 
                        funds under the plan; and
                            ``(ii) not less than 15 days prior to the 
                        hearing, distribute notice of the hearing and a 
                        copy of the proposed plan or plan revision 
                        statewide to the public and directly to the 
                        chief executive officer and the chairperson of 
                        the Board of Directors of the eligible entities 
                        (or designees) and any subgrantees (or 
                        designees) and other interested parties;
                    ``(F) not less often than every 3 years, in 
                conjunction with the development of the State plan, 
                hold at least 1 legislative hearing;
                    ``(G) conduct reviews of eligible entities as 
                required under section 684;
                    ``(H) adopt and report on State performance 
                benchmarks, as described in section 680(c); and
                    ``(I) provided further that, in the event a lead 
                agency chooses to exercise its option to delegate one 
                or more of its duties to another organization by 
                contract, grant, or cooperative agreement, such 
                delegation shall not include its duties under 
                subparagraph (G).
    ``(b) State Application for State Program and State Plan.--
Beginning with the first fiscal year following the transition year, to 
be eligible to receive a grant under section 677 or 678, a State shall 
prepare and submit to the Secretary for approval an application 
containing a State plan covering a period of not more than two fiscal 
years. The application shall be submitted not later than 30 days prior 
to the beginning of the first fiscal year covered by the plan, and 
shall contain such information as the Secretary shall require, 
including--
            ``(1) a description of the manner in which funds made 
        available through the grant under section 677 or 678 will be 
        used to carry out the State activities described in section 
        680A(b) and the State's community action program plans;
            ``(2) a summary of the community action program plans of 
        the eligible entities serving the State;
            ``(3) an assurance that each plan responds to needs 
        identified in the comprehensive community needs assessment for 
        the service area assigned to the entity and is consistent with 
        one or more purposes described in section 672 and that the plan 
        has been adopted by the governing body of each eligible entity;
            ``(4) an assurance that the State has approved all such 
        community action program plans that are consistent with the 
        purposes and requirements of this subtitle;
            ``(5) at the State's option, a statewide strategic plan 
        that--
                    ``(A) includes the State's strategy for 
                implementing its responsibilities under section 680(a); 
                and
                    ``(B) may include the community action strategic 
                plans of the eligible entities and such other matters 
                as the State shall determine to be necessary to 
                complete its strategic plan;
            ``(6) a description of the State's performance measurement 
        system;
            ``(7) a plan for the State's oversight of eligible 
        entities, including, but not limited to--
                    ``(A) the training provided to State over-sight 
                personnel regarding Federal law, regulations and 
                policy, and applicable State practices;
                    ``(B) the policies and procedures adopted for the 
                State's monitoring:
                    ``(C) the State's system for implementing the 
                training and, when necessary, requiring a corrective 
                action plan for eligible entities;
                    ``(D) the management training and technical 
                assistance made available to eligible entities; and
                    ``(E) the method used for assessing the quality of 
                such training;
            ``(8) an assurance that any eligible entity in the State 
        that received, in the previous fiscal year, funding through a 
        grant made under section 677 or 678 will not have such funding 
        withheld, nor reduced below the proportional share of funding 
        the entity received from the State in the previous fiscal year, 
        nor eliminated--
                    ``(A) except according to the procedures set forth 
                in subsection (b), (c), (d), or (e) of section 685; or
                    ``(B) unless the Secretary, in approving an 
                application under this section, approves a change in 
                the statewide proportional distribution of funds under 
                section 680(A)(a)(1) when such change is included as 
                part of a State's application submitted under section 
                680(e)(1) to respond to--
                            ``(i) the results of the most recently 
                        available census or other appropriate 
                        demographic data;
                            ``(ii) severe economic dislocation; or
                            ``(iii) the designation of a new eligible 
                        entity in an unserved geographic area.
            ``(9) a description of the State's requirements that ensure 
        that each eligible entity serving the State establishes 
        procedures that permit low-income individuals, or a community 
        organization or religious organization, that considers low-
        income individuals or the organization, respectively, to be 
        inadequately represented on the Board of Directors of the 
        eligible entity, to petition for adequate representation of 
        such individuals or organization, respectively, on the Board;
            ``(10) a description of the State's requirements, and 
        financial or other support, for each community action program 
        plan and community action strategic plan of an eligible entity 
        in the State and for the comprehensive community needs 
        assessment described in subsection (a)(2)(C) on which the 
        community action program plans are based, which assessment may 
        be coordinated with community needs assessments conducted for 
        programs other than the program carried out under this 
        subtitle;
            ``(11) an assurance that the State and all eligible 
        entities in the State will participate in a performance 
        measurement system that meets the requirements of this 
        subtitle, and a description of the management and program 
        information that will be used to measure State and eligible 
        entity performance in achieving the goals of the State plan and 
        the community action program plans, respectively; and
            ``(12) an assurance that the State's performance 
        measurement system for eligible entities is based, for each 
        eligible entity, upon the results of implementing the entity's 
        own community action program plan and the achievement of the 
        goals of the plan and performance benchmarks described in 
        subsection (c) as adjusted, if necessary, for changes in 
        available funding.
    ``(c) State Performance Requirements and Benchmarks.--
            ``(1) Performance requirements.--Consistent with the 
        requirements of section 687, following the transition period 
        described in section 691(a), in order to be eligible for a 
        grant under section 677 or 678, each State shall adopt 
        performance requirements and the performance benchmarks 
        described in paragraph (2), to be included as part of the 
        performance measurement system described in section 687 and 
        shall provide related training for State personnel carrying out 
        a State program under this subtitle.
            ``(2) Annual state performance benchmarks.--Each State 
        shall include in the State plan submitted under subsection (b), 
        for each fiscal year after the transition period, performance 
        measurements for lead agency management quality including those 
        promulgated by the Secretary, and the State annual performance 
        benchmarks regarding programmatic activities described in 
        section 680A(b) and other performance measures which shall 
        include--
                    ``(A) indicators of timely distribution and 
                effective management of Federal funds by the lead 
                agency and of the compliance with the requirements for 
                State personnel and for management of activities funded 
                under this subtitle (other than this subsection); and
                    ``(B) indicators concerning the results of 
                activities funded by the State under this subsection.
    ``(d) Approval.--The Secretary shall notify the chief executive 
officer of each State submitting an application containing a State plan 
under this section, of the approval, disapproval, or approval in part, 
of the application, within 30 days after receiving the application.
            ``(1) In the event of a partial approval, the Secretary's 
        notification shall include a description of changes necessary 
        for final approval but the Secretary shall not require 
        submission of the State strategic plan described in subsection 
        (b)(4). In the event of such partial approval, the Secretary 
        may allow grantee use of funds for activities included in the 
        portions of the plan which the Secretary has approved.
            ``(2) In the event a State application fails to be approved 
        in whole or in part before the end of the third month of the 
        State program covered by such plan the Secretary may allocate 
        funds as provided in section 685(b)(3)(C).
    ``(e) Revision and Inspection.--
            ``(1) Revisions.--The chief executive officer of a State 
        may revise a State plan submitted under this section and shall 
        submit an application containing the revised plan to the 
        Secretary for approval according to the procedures described in 
        subsections (b) and (c).
            ``(2) Public inspection.--Each plan and revision to a State 
        plan prepared under this section shall be distributed for 
        public inspection and comment. A hearing on such plan or 
        revision shall be held as required under subsection (a)(2)(E), 
        but a State application for merger incentive funds shall not be 
        considered a revision.
    ``(f) Application for Community Action Program and Community Action 
Program Plan.--Beginning with the first fiscal year following the 
transition year, to be eligible to receive a subgrant under section 
680A(a), each eligible entity shall prepare and submit to the State for 
approval an application containing a community action program plan or 
plans covering a period of not more than two fiscal years. Such 
application shall be submitted no later than 90 days before the date 
for submission of the State application to the Secretary. The 
application shall contain information on the intended implementation of 
the eligible entity's activities, including demonstrating--
            ``(1) how the program--
                    ``(A) meets needs identified in the most recent 
                comprehensive community needs assessment, and is 
                consistent with the entity's community action strategic 
                plan for that period; and
                    ``(B) achieves the purposes of this subtitle 
                through programs, projects, and services, which may 
                include the activities described in section 683.
            ``(2) Eligible entity performance requirements and 
        benchmarks.--Not later than the end of the period described in 
        section 691(a), each eligible entity participating in a program 
        funded under this subtitle shall--
                    ``(A) adopt performance benchmarks that include 
                indicators concerning attainment of the goals of the 
                entity's annual community action program plans 
                described in section 673(2), indicators of timely and 
                effective management of Federal and other funds, and 
                indicators of compliance with the requirements of this 
                subtitle;
                    ``(B) participate in a statewide performance 
                measurement system under section 687, including--
                            ``(i) contributing to reports on indicators 
                        of results as measured by the statewide system;
                            ``(ii) establishing and tracking 
                        performance on indicators concerning attainment 
                        of the goals of the entity's community action 
                        strategic plan and community action program 
                        plan;
                            ``(iii) measuring the entity's performance 
                        regarding governance, organizational 
                        development, and professional development of 
                        agency personnel; and
                            ``(iv) establishing an internal management 
                        system that incorporates information regarding 
                        results into subsequent plans, procedures, and 
                        budgets; and
                    ``(C) conduct community-wide comprehensive 
                community needs assessments including assessments of 
                local opportunities to reduce poverty and use the 
                results as a basis for community action strategic 
                plans, for programs, projects, and services provided by 
                the entity, for public engagement in addressing the 
                causes of poverty and the expansion of local economic 
                opportunities, and for the development of linkages 
                among partners that will reinforce initiatives funded 
                under this subtitle, except that funds used for such 
                activities shall not be considered administrative 
                funds.

``SEC. 680A. STATE AND LOCAL USES OF FUNDS.

    ``(a) State Subgrants to Eligible Entities and Other 
Organizations.--
            ``(1) In general.--A State that receives a grant under 
        section 677 or 678 shall reserve 2 percent of the funds made 
        available through the grant for the Community Action 
        Innovations Program described in subsection (c) and, of the 
        remainder, use not less than 90 percent to make subgrants to 
        eligible entities to enable the entities to implement programs, 
        projects, or services for a purpose described in section 672.
            ``(2) Obligational requirements.--
                    ``(A) Date of obligation.--The State shall obligate 
                the funds from the portion described in paragraph (1) 
                to make subgrants under paragraph (1) not later than 
                the later of--
                            ``(i) the 30th day after the date on which 
                        the State receives from the Secretary a Notice 
                        of Funding Availability for the State's 
                        approved State application under section 680; 
                        or
                            ``(ii) the first day of the State program 
                        year for which such funds are approved to be 
                        expended under the State application.
                    ``(B) Availability.--Funds allocated to eligible 
                entities through subgrants made in accordance with 
                paragraph (1) for a fiscal year shall be available for 
                obligation by the eligible entity during that fiscal 
                year and the succeeding fiscal year, subject to 
                paragraph (3).
            ``(3) Recapture and redistribution of unobligated funds.--
                    ``(A) Recapturing funds.--A State may recapture and 
                redistribute funds distributed to an eligible entity 
                for a fiscal year through a subgrant made under 
                paragraph (1) that are unobligated at the end of the 
                fiscal year if such unobligated funds exceed 20 percent 
                of the amount of funds so distributed to such eligible 
                entity for such fiscal year unless the community action 
                program plan approved by the State included a higher 
                percentage of unobligated funds.
                    ``(B) Redistributing funds.--In redistributing 
                funds recaptured in accordance with this paragraph, a 
                State shall redistribute such funds to another eligible 
                entity that is a community action agency and is capable 
                of providing services similar to the services provided 
                by the original recipient of funds in the area served. 
                If no such community action agency is available, the 
                State may redistribute the funds to a private, 
                nonprofit organization that has demonstrated capacity 
                to deliver similar services to residents of the 
                community and that is located in that service area, for 
                activities consistent with the objectives of this 
                subtitle.
    ``(b) Statewide Activities.--
            ``(1) Use of remainder.--
                    ``(A) In general.--A State that receives a grant 
                under section 677 or 678 shall, after carrying out 
                subsection (a), use the remainder of the grant funds 
                for activities described in the State's application 
                approved by the Secretary under section 680(b) as 
                described in subparagraphs (B) and (C) and for 
                administrative expenses subject to the limitations in 
                paragraph (2).
                    ``(B) Training and technical assistance.--After 
                applying subsection (a) and subparagraph (C), the State 
                may use the remaining grant funds for the purposes of--
                            ``(i) providing to eligible entities 
                        training and technical assistance and resources 
                        to respond to specific statewide or regional 
                        conditions that create economic insecurity, 
                        including, but not limited to, emergency 
                        conditions;
                            ``(ii) supporting professional development 
                        activities for eligible entities that enhance 
                        the skills of their local personnel (including 
                        skills of members of the board of directors of 
                        such entities) that such personnel need to 
                        manage private, nonprofit organizations, 
                        including skills for designing and delivering 
                        effective support to individuals seeking 
                        opportunities for economic security, and skills 
                        for designing and managing programs, projects, 
                        or services that lead to change in the economic 
                        and social assets and opportunities of the 
                        community, giving priority to activities 
                        carried out through partnerships of the 
                        organizations with institutions of higher 
                        education;
                            ``(iii) supporting information and 
                        communication resources for the comprehensive 
                        community needs assessments described in 
                        section 680(a)(2)(C);
                            ``(iv) supporting performance measurement 
                        systems consistent with the requirements of 
                        sections 680(c) and 682(b), including 
                        establishing systems to measure the 
                        effectiveness of training delivered under 
                        clause (i), and publishing the results of 
                        measurements taken under the systems;
                            ``(v) promoting coordination and 
                        cooperation among eligible entities in the 
                        State including supporting activities of a 
                        statewide association of community services 
                        network organizations; and
                            ``(vi) supporting the activities of private 
                        non-profit organizations which meet the 
                        purposes of this subtitle and which coordinate 
                        such activities with community services network 
                        organizations in the State.
                    ``(C) Innovative projects to reduce poverty.--
                            ``(i) In general.--The State shall use 
                        amounts reserved under section 680A(a)(1) for a 
                        Community Action Innovations Program to award 
                        subgrants, contracts, or cooperative agreements 
                        to eligible entities, or their associations, to 
                        carry out innovative projects to test or 
                        replicate promising new practices designed to 
                        reduce poverty conditions and to disseminate 
                        the results of such projects for public use.
                            ``(ii) Expenses.--The funds reserved for 
                        projects under this subparagraph may be used 
                        for reasonable expenses, of States and 
                        subgrantees, associated with administration of 
                        such projects and dissemination of their 
                        results.
                            ``(iii) Awards and obligation.--A State 
                        shall award and obligate funds reserved for 
                        projects under this subparagraph during the 
                        first program year for which the funds are 
                        appropriated. Funds provided under this 
                        subparagraph shall remain available until 
                        expended for an innovative project if the 
                        period for that expenditure is specified in an 
                        approved plan described in subparagraph (D) for 
                        that innovative project.
                            ``(iv) Matching requirements.--In the case 
                        of innovative projects that are funded in part 
                        by funds authorized under a Federal law other 
                        than this subtitle, that includes requirements 
                        for matching the Federal funds with non-Federal 
                        funds, funds made available under this 
                        subsection may be deemed to be local funding 
                        for purposes of requirements of such law.
                            ``(v) Real property.--Land or facilities 
                        improved through a project receiving an award 
                        under this subparagraph, for which the amount 
                        of the award is less than 50 percent of the 
                        total project cost, shall not be subject to the 
                        provisions of section 688(a).
                            ``(vi) Eligibility.--Activities funded 
                        under this section may include participants 
                        with incomes not exceeding 80 percent of the 
                        area median income.
                    ``(D) Plan for state use of training, technical 
                assistance, and innovation funds.--To be eligible to 
                use grant funds as described in subparagraph (B) or 
                (C), each State shall submit, not later than the end of 
                the transition period described in section 691(a), as 
                part of the annual State plan submitted under section 
                680(b), a training, technical assistance, and 
                innovation plan, developed in consultation with the 
                community service network organizations in the State, 
                that--
                            ``(i) shall cover up to 2 years; and
                            ``(ii) shall set forth information 
                        describing the way the requirements of that 
                        subparagraph will be implemented and a quality 
                        assurance system for providers of the training, 
                        technical assistance, or innovation project 
                        involved.
            ``(2) Administrative cap.--
                    ``(A) Limitation.--No State may spend more than 5 
                percent of the remainder of the funds after the 
                reservation for the State community action innovations 
                fund as described in section 680A(a)(1) for 
                administrative expenses.
                    ``(B) Definition.--In this paragraph, the term 
                `administrative expenses'--
                            ``(i) means the costs incurred by the 
                        State's lead agency for carrying out planning 
                        and management activities, including 
                        monitoring, oversight, and reporting as 
                        required by this Act; and
                            ``(ii) does not include the cost of 
                        activities conducted under paragraph (1)(B) 
                        other than monitoring.
    ``(c) Eligible Entity Use of Funds.--An eligible entity that 
receives a subgrant under section 680A(a) shall use the subgrant funds 
to carry out a community action program plan with programs, projects, 
and services that shall include--
            ``(1) the activities described in section 680(a)(2)(C) 
        regarding periodic assessment of poverty conditions and 
        opportunities to alleviate such conditions in connection with 
        convening community-wide planning activities; and activities 
        that achieve greater participation of the residents of the 
        communities served in the affairs of the community and the 
        organization and one of more of the activities in paragraph (2) 
        or (3);
            ``(2) programs, projects, or services that are designed to 
        assist low-income individuals and families by providing access 
        to local opportunities for achieving and maintaining economic 
        security, which may include opportunities for the individuals 
        and families--
                    ``(A) to secure and retain meaningful employment at 
                a family-supporting wage;
                    ``(B) to secure an adequate education, improve 
                literacy and language ability, and obtain job-related 
                skills;
                    ``(C) to make better use of available income and 
                build assets;
                    ``(D) to obtain and maintain adequate housing and a 
                healthy living environment, including addressing the 
                heath care needs of individuals and families with 
                services and through changes in local institutions and 
                workplaces (including institutions and workplaces 
                managed by the eligible entity); and
                    ``(E) to obtain emergency materials or other 
                assistance to meet immediate individual or community 
                urgent needs and prevent greater or more prolonged 
                economic instability; and
            ``(3) programs, projects, or services that improve living 
        conditions, increase employment, and expand other economic 
        opportunities in the community served, which may include--
                    ``(A) activities that develop and maintain 
                partnerships for the purpose of changing community, 
                economic, and social conditions of poverty, between the 
                eligible entity and--
                            ``(i) State and local public entities (such 
                        as schools, institutions of higher education, 
                        housing authorities, and law enforcement 
                        agencies); and
                            ``(ii) private partners, including 
                        statewide and local businesses, associations of 
                        private employers, and private charitable and 
                        civic organizations;
                    ``(B) activities that establish linkages among 
                organizations for coordinating initiatives, services, 
                and investments so as to avoid duplication, and 
                maximize the effective use of community resources for 
                creating economic opportunity, including developing 
                lasting social and economic assets; and
                    ``(C) activities that mobilize new investments in 
                the community to reduce the incidence of poverty, 
                including developing lasting social and economic 
                assets.

``SEC. 681. ELIGIBLE ENTITIES AND TRIPARTITE BOARDS.

    ``(a) Designation and Redesignation of Eligible Entities in 
Unserved Areas.--
            ``(1) In general.--If any geographic area of a State is 
        not, or ceases to be, served by an eligible entity the lead 
        agency shall, in consultation with local officials and 
        organizations representing the area, solicit one or more 
        applications and designate a new community action agency to 
        provide programs, projects, or services to the area that is--
                    ``(A) a community action agency that is 
                geographically located in an area within reasonable 
                proximity of or contiguous to the unserved area that is 
                already providing similar programs, projects, or 
                services, and that has demonstrated financial capacity 
                to manage and account for Federal funds; or
                    ``(B) if no community action agency described in 
                subparagraph (A) is available, a private, nonprofit 
                organization (which may include an eligible entity) 
                that is geographically located in, or in reasonable 
                proximity to, the unserved area and that is capable of 
                providing a broad range of programs, projects, or 
                services designed to achieve the purposes of this 
                subtitle as stated in section 672.
            ``(2) Requirement.--In order to serve as the eligible 
        entity for the service area, an entity described in paragraph 
        (1) shall agree to ensure that the governing board of directors 
        of the entity will meet the requirements of subsection 
        (b)(1)(C).
            ``(3) Community.--A service area referred to in this 
        subsection or a portion thereof shall be treated as a community 
        for purposes of this subtitle.
    ``(b) Mergers or Privatization of Eligible Entities.--
            ``(1) In general.--If
                    ``(A) two or more eligible entities determine that 
                the geographic areas of a State which they serve can be 
                more effectively served under a single corporate 
                structure; or
                    ``(B) a public organization that is an eligible 
                entity determines that the area it serves can be more 
                effectively served if it becomes a private public 
                charity;
a State shall assist in developing a plan for implementing such merger 
or privatization, including a budget for transitional costs not to 
exceed two years duration, and, upon approving such plans, may notify 
the Secretary that the entities are in need of and eligible for funds 
from the merger incentive fund established in section 683(a)(1)(B)(iv).
    ``
            ``(2) Plans.--States may establish requirements for merger 
        or privatization plans and for a determination that the merged 
        or privatized entity, or entities, will be capable of 
        conducting a program consistent with the comprehensive needs 
        assessments for the areas served.
    ``(c) Tripartite Boards.--
            ``(1) Private, nonprofit organizations.--
                    ``(A) Board.--In order for a private, nonprofit 
                organization to be considered to be an eligible entity 
                for purposes of section 673(1), the entity shall be 
                governed by a tripartite board of directors described 
                in subparagraph (C) that fully participates in the 
                development, planning, implementation, oversight, and 
                evaluation of the program, project, or service carried 
                out or provided through the subgrant made under section 
                680A(a) and all activities of the entity.
                    ``(B) Selection.--The members of the board referred 
                to in subparagraph (A) shall be selected by the entity.
                    ``(C) Composition of board.--The board shall be 
                composed so as to assure that--
                            ``(i) \1/3\ of the members of the board are 
                        elected public officials holding office on the 
                        date of selection, or their representatives 
                        (but if an elected public official chooses not 
                        to serve, such official may designate a 
                        representative to serve as the voting board 
                        member);
                            ``(ii)(I) not fewer than \1/3\ of the 
                        members are persons chosen in accordance with 
                        democratic selection procedures adequate to 
                        assure that the members referred to in this 
                        clause are representative of low-income 
                        individuals and families in the service area; 
                        and
                            ``(II) each member who is a representative 
                        of low-income individuals and families and is 
                        also selected to represent a specific 
                        geographic area under subclause (I) resides in 
                        such area; and
                            ``(iii) the remainder of the members are 
                        representatives of business, industry, labor, 
                        religious, educational, charitable, or other 
                        significant private groups in the community.
                    ``(D) Expertise.--The eligible entity shall ensure 
                that the members of the board include, or have direct 
                access to, individuals with expertise in financial 
                management, accounting, and law.
                    ``(E) Compliance with tax-exempt and other 
                requirements.--The board of a private, nonprofit 
                organization shall ensure that the board operates and 
                conducts activities under the subgrant made under 
                section 680A(a) in a manner that complies with--
                            ``(i) the requirements for maintaining tax-
                        exempt status under section 501(a) of the 
                        Internal Revenue Code of 1986 (26 U.S.C. 
                        501(a)) regarding the governance of charities 
                        under section 501(c)(3) of the Internal Revenue 
                        Code of 1986 (26 U.S.C. 501(c)(3)); and
                            ``(ii) applicable requirements of State 
                        law.
            ``(2) Public organizations.--
                    ``(A) Board.--In order for a public organization to 
                be considered to be an eligible entity for purposes of 
                section 673(1), the organization shall administer a 
                program, project, or service under the supervision of a 
                tripartite board described in subparagraph (C).
                    ``(B) Selection.--The members of the board referred 
                to in subparagraph (A) shall be selected by the 
                organization.
                    ``(C) Composition of board.--The board shall be 
                composed so as to assure that--
                            ``(i) not more than \1/3\ of the members of 
                        the board are employees or officials, including 
                        elected officials, of the unit of government in 
                        which the organization is located;
                            ``(ii)(I) not fewer than \1/3\ of the 
                        members are persons chosen in accordance with 
                        democratic selection procedures adequate to 
                        assure that the members referred to in this 
                        clause are representative of low-income 
                        individuals and families in the service area; 
                        and
                            ``(II) each member who is a representative 
                        of low-income individuals and families and is 
                        also selected to represent a specific 
                        geographic area under subclause (I) resides in 
                        such area; and
                            ``(iii) the remainder of the members are 
                        representatives of business, industry, labor, 
                        religious, educational, charitable, or other 
                        significant private groups in the community.
                    ``(D) Expertise.--The organization shall ensure 
                that the members of the board include or have direct 
                access to individuals with expertise in financial 
                management, accounting, and law.
                    ``(E) Compliance with state requirements and 
                policy.--The board of a public organization shall 
                ensure that the board operates in a manner that 
                complies with State requirements for open meetings, 
                financial transparency, and State open records policy.
    ``(d) Operations and Duties of the Board.--The duties of a board 
described in paragraph (1) or (2) of subsection (b) shall include--
            ``(1) in the case of a board for a private, nonprofit 
        organization that is an eligible entity, having and legal and 
        financial responsibility for administering overseeing the 
        eligible entity, including making proper use of Federal funds;
            ``(2) ensuring that the guidance regarding organizational 
        performance disseminated by the Secretary under section 
        682(c)(8) is implemented;
            ``(3) adopting practices that assure active, independent, 
        and informed governance of the eligible entity, including 
        establishing terms for officers and adopting a code of ethical 
        conduct, including a conflict of interest policy for board 
        members;
            ``(4) participating in each comprehensive community needs 
        assessment, developing and adopting as a policy for the 
        corresponding eligible entity a community action strategic 
        plan, including provisions for the use of funds under this 
        subtitle, and preparing the community action program plan for 
        the use of funds under this subtitle;
            ``(5) ensuring that the eligible entity manages its 
        activities based on a system of performance measurement;
            ``(6) ensuring compliance by the eligible entity with 
        Federal, and applicable State and local, laws, including 
        regulations;
            ``(7) overseeing financial management, accounting, and 
        reporting policies, and complying with laws regarding financial 
        statements, including--
                    ``(A) selecting an auditor; and
                    ``(B) monitoring corrective action required by 
                audit findings and taking other necessary actions to 
                enable the eligible entity to comply with accounting 
                policies and laws about financial statements;
            ``(8) reviewing all major financial expenditures of the 
        eligible entity, including annually approving the eligible 
        entity's operating budget;
            ``(9) reviewing all major policies of the eligible entity, 
        including--
                    ``(A) conducting annual performance reviews of the 
                eligible entity's chief executive officer (or 
                individual holding an equivalent position); and
                    ``(B) conducting assessments of the eligible 
                entity's progress in carrying out programmatic and 
                fiscal provisions in the community action program plan, 
                and in taking any corrective action;
            ``(10) adopting personnel policies and procedures, 
        including policies and procedures for hiring, annual 
        evaluation, compensation, and termination, of eligible entity's 
        chief executive officer (or individual holding a similar 
        position); and
            ``(11) adopting and periodically updating written conflict 
        of interest policies for members of the board.

``SEC. 682. OFFICE OF COMMUNITY SERVICES.

    ``(a) Office.--
            ``(1) The Secretary shall establish an Office of Community 
        Services in the Department of Health and Human Services 
        (referred to in this subtitle as the `Department') to carry out 
        the functions of this subtitle.
            ``(2) The Office shall be headed by a Director (referred to 
        in this subtitle as the `Director').
    ``(b) Grants, Contracts, and Cooperative Agreements.--The 
Secretary, acting through the Director, shall carry out the functions 
of this subtitle through grants, contracts, or cooperative agreements.
    ``(c) Duties, Management, and Integration.--The Secretary shall--
            ``(1) coordinate the activities of all personnel and 
        contractors of the Department, concerning monitoring (including 
        inspecting) eligible entities that receive subgrants under this 
        subtitle and are funded or monitored by an office of the 
        Department other than the Office of Community Services, in 
        order to efficiently organize oversight visits, inspections, 
        and audits of such entities by conducting joint oversight 
        operations, as practicable;
            ``(2) promulgate skill requirements, for Department 
        officials with responsibility for monitoring and approving 
        State programs under this subtitle, regarding the knowledge, 
        skills, and abilities required to assess and provide technical 
        assistance regarding the operations of private, nonprofit 
        organizations responsible for implementing multiple Federal and 
        other community-based initiatives;
            ``(3) ensure that personnel and contractors of the 
        Department with responsibility for State programs under this 
        subtitle acquire the knowledge, skills, and abilities described 
        in paragraph (2);
            ``(4) establish minimum requirements for the knowledge and 
        skills of State personnel responsible for overseeing the 
        activities authorized by this subtitle;
            ``(5) promulgate performance indicators for State 
        management of the funds, operations and programmatic 
        requirements of this subtitle;
            ``(6) establish and publish uniform procedures for use by 
        Federal and State monitors of the activities authorized by this 
        subtitle;
            ``(7) promulgate regulations with respect to the procedures 
        for State and local corrective action plans described in 
        section 687 (including promulgating a definition of a serious 
        deficiency for purposes of that section) to ensure prompt 
        resolution of deficiencies and adherence to the uniform 
        administrative requirements, cost principles, and audit 
        requirements described in section 676(b); and
            ``(8) disseminate or cause to be disseminated guidance 
        regarding the organizational practices and performance of 
        eligible entities developed jointly by the Director and the 
        community services network organizations.
    ``(d) Federal Performance Benchmarks.--The Secretary shall, prior 
to the beginning of each fiscal year, publish Federal performance 
benchmarks for the Office of Community Services for such year, which 
shall include targets for--
            ``(1) the timeliness of--
                    ``(A) apportionments and allotments of appropriated 
                funds to States; and
                    ``(B) the use of funds reserved pursuant to section 
                692(b);
            ``(2) the timeliness of approvals or notifications 
        concerning State plans and plan revisions described in section 
        680;
            ``(3) the timeliness of scheduled monitoring of States and 
        implementation of State corrective action plans described in 
        section 687;
            ``(4) the implementation of the requirements of the uniform 
        administrative requirements, cost principles, and audit 
        requirements described in section 676(b) by the Department, the 
        States, and other grantees;
            ``(5) the implementation of the requirements for 
        coordinated audits and monitoring by multiple offices of the 
        Department;
            ``(6) the improvement achieved by Federal personnel in 
        acquiring the knowledge, skills, and abilities described in 
        subsection (c)(2) and needed to effectively carry out 
        subsection (c)(1);
            ``(7) the progress made by the Office of Community Services 
        in achieving each of the requirements of this subtitle; and
            ``(8) the timeliness of reports required by this subtitle.

``SEC. 683. TRAINING, TECHNICAL ASSISTANCE, AND RELATED ACTIVITIES.

    ``(a) Activities.--
            ``(1) The Secretary shall, in accordance with the plan 
        described in subsection (d)(2)--
                    ``(A) use amounts reserved under section 
                692(c)(2)(A) for training, technical assistance, 
                planning, evaluation, and performance measurement, 
                through States and other community services network 
                organizations to assist in--
                            ``(i) development or replication of 
                        innovative initiatives;
                            ``(ii) carrying out professional 
                        development activities that expand the capacity 
                        of eligible entities;
                            ``(iii) carrying out performance 
                        measurement, reporting, and data collection 
                        activities related to programs carried out 
                        under this subtitle; and
                            ``(iv) correcting programmatic 
                        deficiencies, including such deficiencies of 
                        eligible entities; and
                    ``(B) the Secretary shall distribute the amounts 
                reserved under section 692(c)(2)(B) directly to States, 
                eligible entities, or other community services network 
                organizations and their partners, including 
                institutions of higher education, that carry out 
                activities to achieve the goals of the plan described 
                in subsection (b)(2) for--
                            ``(i) professional development for key 
                        personnel;
                            ``(ii) activities to improve program and 
                        financial management practices (including 
                        practices related to performance management 
                        information systems);
                            ``(iii) activities that train individuals 
                        and organizations to effectively address the 
                        needs of low-income families and communities 
                        through place-based strategies for coordinated 
                        investment and integrated service delivery; and
                            ``(iv) provided that 7.5 percent of such 
                        reserved amount remain available until the end 
                        of the second quarter of the year for which 
                        funds are appropriated for grants by the 
                        Secretary which shall be awarded to States upon 
                        approval of an application by the State as 
                        described in section 680(b) for funds to 
                        support the one-time costs incurred by two or 
                        more eligible entities for legal, financial and 
                        other activities required to effect a merger of 
                        operations and programs that achieves greater 
                        efficiency and impact for the use of funds 
                        appropriated under this subtitle. Any funds not 
                        designated for such merger incentives by the 
                        end of the second quarter of the fiscal year 
                        shall be available for other authorized 
                        purposes of this subsection.
    ``(b) Limitation.--None of the funds allocated under subsection (a) 
may be used for expenses or salaries of Federal employees.
    ``(c) Grants, Contracts, and Cooperative Agreements.--The 
activities described in paragraph (1)(A) shall be carried out by the 
Secretary through grants, contracts, or cooperative agreements with 
appropriate entities, which shall include all statewide associations of 
eligible entities that meet the requirements for receipt of Federal 
funds.
    ``(d) Training and Technical Assistance Process.--
            ``(1) In general.--In order to determine the training, 
        technical assistance, and other activities to be provided or 
        supported under subsection (a), the Secretary, acting through 
        the Director, shall develop and carry out the strategic plan 
        described in paragraph (2), and the activities described in 
        paragraph (3).
            ``(2) Office of community services strategic training 
        plan.--
                    ``(A) In general.--Not less often than every fourth 
                year the Secretary, acting through the Director and in 
                consultation with community service network 
                organizations, shall develop, publish, and carry out a 
                strategic plan for the use of funds reserved for use 
                under section 692(c)(2).
                    ``(B) Contents.--Such a plan shall describe--
                            ``(i) the activities that will be supported 
                        (including their goals), the partnerships, if 
                        any, required to conduct such activities, the 
                        role of each partner participating, the system 
                        for delivering the intended results, and the 
                        timing of such activities;
                            ``(ii) the manner in which the plan ensures 
                        that the Secretary complies with each 
                        requirement of this subtitle related to 
                        training and technical assistance;
                            ``(iii) the manner in which the plan 
                        reflects coordination of activities funded 
                        under this section with related training and 
                        technical assistance provided by the 
                        Department, especially for programs, projects, 
                        and services other than those funded under this 
                        subtitle operated by eligible entities;
                            ``(iv) the manner in which the results of 
                        such activities will be measured;
                            ``(v) quality standards for training and 
                        trainers to ensure that only effective training 
                        is funded under this section; and
                            ``(vi) to the maximum extent feasible, how 
                        the activities funded under this section 
                        address--
                                    ``(I) the needs of eligible 
                                entities and State lead agencies 
                                relating to skills and techniques to 
                                ensure the quality (including quality 
                                of financial management practices) of 
                                programs, projects, and services 
                                supported under this subtitle; and
                                    ``(II) other professional 
                                development needs of the eligible 
                                entities related to carrying out this 
                                subtitle.
            ``(3) Evaluation of training and technical assistance.--The 
        Secretary, acting through the Director--
                    ``(A) shall establish a procedure for evaluating 
                the quality and effectiveness of training and technical 
                assistance provided under this section related to 
                professional development, local organizational 
                development and management including, but not limited 
                to financial management, and State government 
                management; and
                    ``(B) shall use the results of the evaluations as 
                significant criteria for selecting recipients of funds 
                under this section.

``SEC. 684. STATE MONITORING OF ELIGIBLE ENTITIES.

    ``(a) Monitoring by States.--In order to determine whether eligible 
entities receiving subgrants under this subtitle meet performance 
benchmarks described in section 680(f)(2), administrative standards, 
financial management requirements, and other requirements under this 
subtitle, the State shall conduct the following reviews of eligible 
entities:
            ``(1) A full onsite review of each eligible entity at least 
        once during each 3-year period.
            ``(2) An onsite review of each newly designated eligible 
        entity immediately after the completion of the first year in 
        which such entity receives funds through the community services 
        block grant program under this subtitle.
            ``(3) Follow-up reviews, including onsite reviews scheduled 
        in a corrective action plan (including return visits), within a 
        calendar quarter for eligible entities with programs, projects, 
        or services that fail to meet the State's performance criteria, 
        standards, financial management requirements, and other 
        significant requirements established under this subtitle.
            ``(4) Other reviews as appropriate, including reviews of 
        eligible entities with programs, projects, and services that 
        have had other Federal, State, or local grants (other than 
        assistance provided under this subtitle) terminated for cause.
    ``(b) Training and Technical Assistance for Monitoring.--The State 
may request training and technical assistance from the Secretary as 
needed to comply with the requirements of this section.

``SEC. 685. EVALUATIONS; CORRECTIVE ACTION; WITHHOLDING, REDUCTION, OR 
              ELIMINATION OF FUNDING.

    ``(a) Evaluations of States by the Secretary.--
            ``(1) In general.--The Secretary shall conduct, in not 
        fewer than \1/3\ of the States in each fiscal year, evaluations 
        (including investigations) of State compliance with this 
        subtitle, including requirements relating to the use of funds 
        received under this subtitle, and especially with respect to 
        compliance with the requirements of State plans submitted under 
        section 680(b) and the uniform administrative requirements, 
        cost principles, and audit requirements described in section 
        676(b) as applied to funds received under this subtitle.
            ``(2) Report to states.--The Secretary shall submit, to 
        each State evaluated, a report containing--
                    ``(A) the results of such evaluation; and
                    ``(B)(i) recommendations for improvements designed 
                to enhance the benefit and impact of the activities 
                carried out with such funds; and
                    ``(ii) in the event a serious deficiency is found 
                regarding a State's compliance with this subtitle, 
                including requirements relating to the use of funds 
                received under this subtitle, a proposed corrective 
                action plan that meets the requirements of subsection 
                (b)(2)(B).
            ``(3) State response.--Not later than 45 days after 
        receiving a report under paragraph (2)--
                    ``(A) a State that received recommendations under 
                paragraph (2)(B)(i) shall submit to the Secretary a 
                plan of action in response to the recommendations; and
                    ``(B) a State that received a proposed corrective 
                action plan under paragraph (2)(B)(ii) shall carry out 
                the State's responsibilities under subsection (b)(2).
            ``(4) Report to congress.--The Secretary shall submit the 
        results of the evaluations annually, as part of the report 
        submitted by the Secretary in 6 accordance with section 
        689(b)(2).
    ``(b) Determination of State Failure To Comply.--
            ``(1) Duties of the secretary.--If the Secretary finds, on 
        the basis of an evaluation pursuant to subsection (a), that 
        there is a serious deficiency regarding a State's compliance 
        with this subtitle, the Secretary shall--
                    ``(A) inform the State, through the report 
                described in subsection (a)(2) and any proposed 
                corrective action plan submitted under subsection 
                (a)(2)(B), of the deficiency;
                    ``(B) provide assistance consistent with section 
                685 and subsection (c);
                    ``(C) with respect to each identified serious 
                deficiency, require that the State--
                            ``(i) correct the deficiency immediately if 
                        the Secretary finds that the deficiency 
                        threatens the ability of eligible entities to 
                        carry out their community action program plans 
                        or threatens the integrity of Federal funds; or
                            ``(ii) correct the deficiency not later 
                        than 90 days after the identification of the 
                        deficiency if the Secretary finds, in the 
                        discretion of the Secretary, that such a 90-day 
                        period is reasonable, in light of the nature 
                        and magnitude of the deficiency; and
                    ``(D) require that the State carry out--
                            ``(i) the corrective action plan prepared 
                        by the Secretary under subsection 
                        (a)(2)(B)(ii); or
                            ``(ii) a State-proposed corrective action 
                        plan that is approved under paragraph (2)(C).
            ``(2) Corrective action plans.--
                    ``(A) In general.--A State that is found under 
                paragraph (1) to have a serious deficiency shall--
                            ``(i) agree to implement the corrective 
                        action plan proposed by the Secretary under 
                        subsection (a)(2)(B)(ii); or
                            ``(ii) propose to the Secretary a different 
                        corrective action plan, developed by the State 
                        in a timely manner that the State will 
                        implement upon approval by the Secretary under 
                        subparagraph (C).
                    ``(B) Contents.--Any corrective action plan 
                proposed under this paragraph shall specify--
                            ``(i) the serious and other deficiencies to 
                        be corrected;
                            ``(ii) the actions to be taken to correct 
                        such deficiencies; and
                            ``(iii) the timetable for accomplishment of 
                        the corrective actions specified, which shall 
                        provide that each serious deficiency is 
                        corrected by not later than 90 days after the 
                        date the State received notice of the finding 
                        under subsection (a) and of the specific 
                        deficiency to be corrected.
                    ``(C) Approval processes.--
                            ``(i) In general.--Not later than 15 days 
                        after the Secretary receives a State proposed 
                        corrective action plan in accordance with 
                        subparagraph (A), the Secretary shall act--
                                    ``(I) by approving the proposed 
                                plan; or
                                    ``(II) by notifying the State that 
                                the proposed plan cannot be approved, 
                                providing the reasons for the 
                                disapproval, and proposing an 
                                alternative corrective action plan.
                            ``(ii) State response.--
                                    ``(I) In general.--A State whose 
                                corrective action plan has not been 
                                approved under clause (i) shall respond 
                                by agreeing to implement the 
                                alternative corrective action plan, or 
                                by submitting a different proposed 
                                corrective action plan not later than 
                                15 days after receiving notification 
                                from the Secretary under clause (i).
                                    ``(II) Inadequate different 
                                proposed plan.--If the Secretary 
                                determines the different proposed plan 
                                to be inadequate, the Secretary shall 
                                use the procedures to withhold funding 
                                described in paragraph (3)(A) until the 
                                State and the Secretary agree on, and 
                                the State implements a satisfactory 
                                corrective action plan. If the 
                                Secretary makes that determination, the 
                                Director, pursuant to paragraph (3)(C), 
                                shall ensure that the affected funds 
                                are obligated and made available to 
                                eligible entities on the same schedule 
                                as the State would have been required 
                                to follow if the Secretary had not made 
                                the determination.
            ``(3) Enforcement.--
                    ``(A) Withholding of funding.--If the Secretary 
                determines that a State fails to meet the requirements 
                of this subsection, including a failure to comply with 
                the terms of a corrective action plan described in 
                subsection (a)(2)(B) or approved under paragraph (2) or 
                a failure to correct a serious deficiency in accordance 
                with the timing requirements of paragraph (1)(C), the 
                Secretary may initiate proceedings to withhold all or a 
                portion of the amount of the funding described in 
                section 680A(b)(2)(A), including prohibiting the State 
                from using other funds awarded under this subtitle to 
                carry out the activities described in such section, 
                until the State complies with all requirements of this 
                subsection.
                    ``(B) Reduction or elimination of funding.--If the 
                Secretary determines, on the basis of a final decision 
                in a review conducted under this section that a State 
                fails to meet the requirements of this subsection, the 
                Secretary may, after providing adequate notice and an 
                opportunity for a hearing, initiate proceedings to 
                reduce or eliminate the amount of funding described in 
                section 680A(b)(2)(A), including prohibiting the State 
                from using other funds awarded under this subtitle to 
                carry out the activities described in such section, 
                unless the State corrects the failure to meet the 
                requirements.
                    ``(C) Use of funds.--
                            ``(i) If the Secretary delays, reduces, or 
                        eliminates funding to a State under 
                        subparagraph (B), the Secretary shall award the 
                        amount of the funding to eligible entities and/
                        or community services network organizations in 
                        the State, to carry out the activities 
                        described in section 680A(b).
                            ``(ii) In the event a State elects not to 
                        receive funding under this subtitle, including 
                        a refusal to submit a plan meeting the 
                        Secretary's requirements, the Secretary shall 
                        provide funding directly by grant or 
                        cooperative agreement to eligible entities in 
                        good standing at the end of the last fiscal 
                        year for which the State received an allocation 
                        under this subtitle.
            ``(4) Training and technical assistance.--The Secretary 
        shall provide training and technical assistance to States with 
        respect to the development or implementation of the States' 
        corrective action plans.
    ``(c) Determination of Local Agency Failure To Comply.--
            ``(1) Corrective action by local agencies.--If the State 
        determines, on the basis of a review pursuant to section 684 or 
        section 686, that there is a serious deficiency regarding an 
        eligible entity's compliance with this subtitle, the State 
        shall--
                    ``(A) inform the entity of the serious deficiencies 
                that shall be corrected and provide technical 
                assistance for the corrective action;
                    ``(B) with respect to each identified serious 
                deficiency, require that the eligible entity--
                            ``(i) correct the deficiency immediately if 
                        the State finds that the deficiency threatens 
                        the ability of the eligible entity to carry out 
                        the entity's community action program plan or 
                        threatens the integrity of Federal funds;
                            ``(ii) correct the deficiency not later 
                        than 90 days after the identification of the 
                        deficiency if the State finds that such a 90-
                        day period is reasonable, in light of the 
                        nature and magnitude of the deficiency; or
                            ``(iii) in the discretion of the State 
                        (taking into consideration the seriousness of 
                        the deficiency and the time reasonably required 
                        to correct the deficiency), comply with the 
                        requirements of paragraph (2) concerning a 
                        corrective action plan;
                    ``(C) initiate proceedings to withhold, reduce, or 
                eliminate the funding described in section 680A(a) 
                including, in the case of elimination of funding, 
                terminating the designation under this subtitle of the 
                eligible entity unless the entity corrects the 
                deficiency as required; and
                    ``(D) ensure that the State's definitions, 
                procedures, and requirements under this section 
                regarding serious deficiencies of eligible entities are 
                in accordance with policies and regulations promulgated 
                by the Secretary to implement the uniform 
                administrative requirements, cost principles, and audit 
                requirements described in section 676(b) with respect 
                to this subtitle.
            ``(2) Local corrective action plans.--
                    ``(A) In general.--An eligible entity that is found 
                to have a serious deficiency under paragraph (1) shall 
                develop, in a timely manner, a corrective action plan 
                that shall be subject to the approval of the State, and 
                that shall specify--
                            ``(i) the deficiencies to be corrected;
                            ``(ii) the actions to be taken to correct 
                        such deficiencies; and
                            ``(iii) the timetable for accomplishment of 
                        the corrective actions specified.
                    ``(B) Approval process.--
                            ``(i) In general.--Not later than 15 days 
                        after the State receives an entity's proposed 
                        corrective action plan in accordance with 
                        subparagraph (A), the State shall review the 
                        proposed plan and act--
                                    ``(I) by approving the proposed 
                                plan; or
                                    ``(II) by notifying the entity that 
                                the proposed plan cannot be approved, 
                                providing the reasons for the 
                                disapproval, and proposing an 
                                alternative corrective action plan.
                            ``(ii) Entity's response.--An entity whose 
                        corrective action plan has not been approved 
                        under clause (i) shall respond by agreeing to 
                        implement the alternative corrective action 
                        plan, or by submitting a different proposed 
                        corrective action plan, not later than 10 
                        working days after receiving notification from 
                        the State under clause (i).
                            ``(iii) Inadequate different proposed 
                        plan.--If the State determines the different 
                        proposed plan to be inadequate, the State may 
                        withhold funding as described in paragraph (3) 
                        until the entity implements a satisfactory 
                        corrective action plan.
            ``(3) Final decision.--If the State determines, on the 
        basis of a final decision in a review conducted under section 
        684(a)(3), that an eligible entity fails to comply with the 
        terms of a corrective action plan under paragraph (2) relating 
        to correction of a serious deficiency for the eligible entity, 
        the State may, after providing adequate notice and an 
        opportunity for a hearing, initiate proceedings to withhold, 
        reduce, or eliminate the funding provided under section 680A(a) 
        to the eligible entity (including, in the case of elimination 
        of funding, terminating the designation under this subtitle of 
        the eligible entity) unless the entity corrects the serious 
        deficiency.
            ``(4) Training and technical assistance.--The State shall 
        provide training and technical assistance to eligible entities 
        with respect to the development or implementation of the 
        entities' corrective action plans.
            ``(5) Special circumstance.--In the event the State has 
        credible evidence that funds have been expended with fraudulent 
        or other criminal intent, funding may be suspended while the 
        procedures to review such evidence are conducted by appropriate 
        investigative entities or until the State determines funds will 
        not be at risk, whichever is earlier.
    ``(d) Review.--
            ``(1) In general.--A State's determination under subsection 
        (c) to terminate such designation or reduce such funding of an 
        eligible entity may be reviewed by the Secretary. The Secretary 
        shall, upon request, by a community services network 
        organization, review such a determination. The review shall be 
        completed not later than 60 days after the Secretary receives 
        from the State all necessary documentation relating to the 
        determination except as provided in paragraph (2).
            ``(2) Failure to provide documentation.--If the State fails 
        to provide such documentation within 30 days after the 
        Secretary's request, the State may not expend funds for the 
        purposes described in section 680A(b)(2) until the State 
        provides such documentation. The Secretary shall respond to the 
        State with a decision not later than 30 days after receiving 
        the documentation.
    ``(e) Direct Assistance.--Whenever the Secretary determines that a 
State has violated the assurances described in paragraphs (8), (11), or 
(12) of section 680(b) and has withheld, reduced, or eliminated the 
funding provided under section 680A(a) to an eligible entity prior to 
the completion of the State proceedings described in subsection (c)(3) 
and the Secretary's review as required in subsection (d), the Secretary 
shall provide financial assistance under this subtitle to the eligible 
entity until the violation is corrected by the State. In such a case, 
the grant for the State under section 677 or 678 for the earliest 
appropriate fiscal year shall be reduced by an amount equal to the 
financial assistance provided under this subsection to such eligible 
entity.

``SEC. 686. STATE AND LOCAL FISCAL CONTROLS, AUDITS, AND WITHHOLDING.

    ``(a) Fiscal Controls, Procedures, Audits, and Inspections.--
            ``(1) In general.--A State that receives funds under this 
        subtitle shall--
                    ``(A) establish fiscal control and fund accounting 
                procedures necessary to assure the proper disbursal of 
                and accounting for Federal funds paid to the State 
                under this subtitle, including procedures for 
                monitoring the funds provided under this subtitle;
                    ``(B) subject to paragraphs (2) and (3), prepare, 
                not less than once each year, an audit of the 
                expenditures of the State of amounts received under 
                this subtitle; and
                    ``(C) make appropriate books, documents, papers, 
                and records available to the Secretary and the 
                Comptroller General of the United States, or any of 
                their duly authorized representatives, for examination, 
                copying, or mechanical reproduction on or off the 
                premises of the appropriate entity upon a reasonable 
                request for the items.
            ``(2) Independent entity.--Subject to paragraph (3), each 
        audit required by paragraph (1)(B) shall be conducted by an 
        entity independent of any agency administering activities or 
        services under this subtitle and shall be conducted in 
        accordance with generally accepted accounting principles.
            ``(3) Single audit requirements.--
                    ``(A) In general.--Any audit under this subsection 
                shall be conducted in the manner and to the extent 
                provided in chapter 75 of title 31, United States Code 
                (commonly known as the `Single Audit Act Amendments of 
                1986') except in the event a serious financial 
                deficiency is identified.
                    ``(B) Serious financial deficiency.--In the event 
                that such a deficiency is identified, the Secretary 
                shall order--
                            ``(i) an audit conducted as described in 
                        subparagraph (A); or
                            ``(ii) an audit of each of the accounts 
                        involved, in accordance with paragraphs (2) and 
                        (4).
            ``(4) Submission of copies.--Not later than 30 days after 
        the completion of each such audit in a State, the chief 
        executive officer of the State shall submit copies of such 
        audit, at no charge, to any eligible entity that was the 
        subject of the audit, to the legislature of the State, and to 
        the Secretary.
            ``(5) Repayments.--If the Secretary, after review of the 
        audit, finds that a State has not expended an amount of funds 
        in accordance with this subtitle, the State shall immediately 
        use an amount of State funds equal to the amount of improperly 
        expended funds for the original purposes for which the grant 
        funds were intended.
            ``(6) Response to complaints.--The Secretary shall respond 
        in an expeditious and speedy manner to complaints of a 
        substantial or serious nature that a State has failed to use 
        grant funds received under section 677 or 678 or to carry out 
        State activities under this subtitle in accordance with the 
        provisions of this subtitle.
            ``(7) Investigations.--Whenever the Secretary determines 
        that there is a pattern of complaints regarding failures 
        described in paragraph (6) or a complaint of a serious 
        deficiency concerning any State, the Secretary shall conduct an 
        investigation of the use of the funds received under this 
        subtitle by such State in order to ensure compliance with the 
        provisions of this subtitle.
    ``(b) State Funds.--
            ``(1) Corrective action plan.--In the event the Secretary 
        withholds, reduces, or eliminates funding pursuant to section 
        685(b)(3)(A), the Secretary shall subsequently make the 
        withheld, reduced, or eliminated funding available to the State 
        not later than 90 days after the date for correction of the 
        serious deficiency specified in such plan if the State complies 
        with a corrective action plan described in section 
        685(b)(2)(A).
            ``(2) Application.--For purposes of paragraph (1), failures 
        described in paragraph (1)(a)(6) shall be considered to be 
        serious deficiencies.

``SEC. 687. ACCOUNTABILITY AND REPORTING REQUIREMENTS.

    ``(a) State Accountability and Reporting Requirements.--
            ``(1) Performance measurement.--
                    ``(A) In general.--By October 1, 2014, each State 
                that receives funds under this subtitle shall 
                participate, and shall ensure that all eligible 
                entities in the State participate, in a performance 
                measurement system that the Secretary is satisfied 
                meets the requirements of paragraphs (11) and (12) of 
                section 680(b).
                    ``(B) Local organizations.--The State may elect to 
                have local organizations that are subgrantees of the 
                eligible entities under this subtitle participate in 
                the performance measurement system. If the State makes 
                that election, references in this section to eligible 
                entities shall be considered to include the local 
                organizations.
                    ``(C) Eligible entity reports.--Eligible entities 
                shall provide the results measured by their performance 
                measurement system, reports on the achievement of their 
                annual benchmarks and such other reports as the State 
                may require.
            ``(2) Annual report.--Each State receiving funds under this 
        subtitle shall annually prepare, and submit to the Secretary by 
        March 31 of each year, a report on the performance of the State 
        and eligible entities in the State, including achievement with 
        respect to the State lead agency performance benchmarks and the 
        local performance benchmarks respectively and to other 
        performance measurements that were used by community service 
        network organizations in the State for the prior year. Each 
        State shall also include in the report--
                    ``(A) an accounting of the expenditure of funds 
                received by the State through the community services 
                block grant program, including an accounting of funds 
                spent on administrative or indirect costs by the State 
                and the eligible entities and funds spent by the 
                eligible entities on local programs, projects, and 
                services;
                    ``(B) information on the number and characteristics 
                of clients served under this subtitle in the State, 
                based on data collected from the eligible entities;
                    ``(C) a summary describing the training and 
                technical assistance offered by the State under section 
                680A(b)(1)(B) and 680A(b)(1)(D) during the year covered 
                by the report and the State's progress toward meeting 
                its training and technical assistance plan goals;
                    ``(D) the State's management performance benchmark 
                results;
                    ``(E) information on the total budget and 
                activities of the eligible entities receiving subgrants 
                from the State under this subtitle, including local and 
                private resources available for a purpose described in 
                section 672;
                    ``(F) a report on the Community Action Innovations 
                Program in the State; and
                    ``(G) a report on the manner in which the State and 
                eligible entities and other recipients of funds under 
                this subtitle have implemented results oriented 
                management practices based on their performance 
                measurement systems.
    ``(b) Reporting Requirements.--
            ``(1) Contents.--Not later than September 30 of each fiscal 
        year, the Secretary shall, directly or by grant or contract, 
        prepare a report containing--
                    ``(A) the information included in the State annual 
                reports under subsection (a)(2) for the preceding 
                fiscal year;
                    ``(B) a report on the performance of the Department 
                in the preceding fiscal year regarding the performance 
                benchmarks established under section 682(d);
                    ``(C) a description of the training and technical 
                assistance activities funded by the Secretary under 
                section 683 and the results of those activities, 
                including a report on progress toward achieving the 
                goals of the Secretary's strategic plan for training 
                and technical assistance described in section 
                683(d)(2); and
                    ``(D) any additional information that the Secretary 
                considers to be appropriate to carry out this subtitle.
            ``(2) Submission.--The Secretary shall submit to the 
        Committee on Education and the Workforce of the House of 
        Representatives and to the Committee on Health, Education, 
        Labor, and Pensions of the Senate the report described in 
        paragraph (1) and any recommendations the Secretary may have 
        with respect to such report.
            ``(3) Electronic data system for reports to states and 
        eligible entities.--The Secretary shall provide technical 
        assistance, including support for development and maintenance 
        of an electronic data system for the reports under this 
        section, to the States and eligible entities to enhance the 
        quality and timeliness of reports submitted under this 
        subtitle. The system shall be coordinated and consistent with 
        the data systems established for other programs of the 
        Department that are managed by eligible entities, including all 
        programs of the Administration for Children and Families or 
        successor administrative units in which the office is located.

``SEC. 688. LIMITATIONS ON USE OF FUNDS.

    ``(a) Construction of Facilities.--
            ``(1) Limitations.--Except as provided in paragraph (2) and 
        in section 680(b)(1)(C), grants or subgrants made under this 
        subtitle may not be used by the State, or by any other person 
        with which the State makes arrangements to carry out a purpose 
        described in section 672, for the purchase or improvement of 
        any building or other facility.
            ``(2) Waiver.--The Secretary may waive the limitation 
        contained in paragraph (1) upon a State request for such a 
        waiver if the Secretary finds that the request describes 
        extraordinary circumstances to justify the purchase or 
        improvement of land, or the purchase, construction or permanent 
        improvement of any building or other facilities, and that 
        permitting the waiver will contribute to the ability of the 
        State and eligible entities to carry out a purpose described in 
        section 672 at substantially reduced costs.
    ``(b) Political Activities.--
            ``(1) Treatment as a state or local agency.--For purposes 
        of chapter 15 of title 5, United States Code, any entity that 
        assumes responsibility for planning, developing, and 
        coordinating activities under this subtitle and receives 
        assistance under this subtitle shall be deemed to be a State or 
        local agency. For purposes of paragraphs (1) and (2) of section 
        1502(a) of such title, any entity receiving assistance under 
        this subtitle shall be deemed to be a State or local agency.
            ``(2) Prohibitions.--An entity carrying out a program, 
        project, or service assisted under this subtitle, and any 
        individual employed by, or assigned to or in, such a program, 
        project, or service (during the hours in which the individual 
        is working on behalf of the program, project, or service) shall 
        not engage in--
                    ``(A) any partisan or nonpartisan political 
                activity or any political activity associated with a 
                candidate, or contending faction or group, in an 
                election for public or party office; or
                    ``(B) any activity to provide voters or prospective 
                voters with transportation to the polls or similar 
                assistance in connection with any such election.
            ``(3) Registration.--None of the funds appropriated to 
        carry out this subtitle may be used to conduct voter 
        registration activities.
    ``(c) Nondiscrimination.--
            ``(1) In general.--No person shall, on the basis of race, 
        color, national origin, or sex be excluded from participation 
        in, be denied the benefits of, or be subjected to 
        discrimination under, any program, project, or service funded 
        in whole or in part with funds made available under this 
        subtitle. Any prohibition against discrimination on the basis 
        of age under the Age Discrimination Act of 1975 (42 U.S.C. 6101 
        et seq.) or with respect to an otherwise qualified individual 
        with a disability as provided in section 504 of the 
        Rehabilitation Act of 1973 (29 U.S.C. 794), or title II of the 
        Americans with Disabilities Act of 1990 (42 U.S.C. 12131 et 
        seq.) shall also apply to any such program, project, or 
        service.
            ``(2) Action of secretary.--Whenever the Secretary 
        determines that a State that has received a payment under this 
        subtitle has failed to comply with paragraph (1) or an 
        applicable regulation, the Secretary shall notify the chief 
        executive officer of the State and shall request that the 
        officer secure compliance. If within a reasonable period of 
        time, not to exceed 60 days, the chief executive officer fails 
        or refuses to secure compliance, the Secretary is authorized 
        to--
                    ``(A) refer the matter to the Attorney General with 
                a recommendation that an appropriate civil action be 
                instituted;
                    ``(B) exercise the powers and functions provided by 
                title VI of the Civil Rights Act of 1964 (42 U.S.C. 
                2000d et seq.), the Age Discrimination Act of 1975 (42 
                U.S.C. 6101 et seq.), section 504 of the Rehabilitation 
                Act of 1973 (29 U.S.C. 794), or title II of the 
                Americans with Disabilities Act of 1990 (42 U.S.C. 
                12131 et seq.), as may be applicable; or
                    ``(C) take such other action as may be provided by 
                law.
            ``(3) Action of attorney general.--When a matter is 
        referred to the Attorney General pursuant to paragraph (2), or 
        whenever the Attorney General has reason to believe that the 
        State is engaged in a pattern or practice of discrimination in 
        violation of the provisions of this subsection, the Attorney 
        General may bring a civil action in any appropriate United 
        States district court for such relief as may be appropriate, 
        including injunctive relief.

``SEC. 689. DRUG AND CHILD SUPPORT SERVICES AND REFERRALS.

    ``(a) Drug Testing and Rehabilitation.--
            ``(1) In general.--Nothing in this subtitle shall be 
        construed to prohibit a State from testing participants in 
        programs, projects, or services carried out or provided under 
        this subtitle for controlled substances. A State that conducts 
        such testing shall inform the participants who test positive 
        for any of such substances about the availability of treatment 
        or rehabilitation services and refer such participants for 
        appropriate treatment or rehabilitation services.
            ``(2) Administrative expenses.--Any funds provided under 
        this subtitle expended for such testing shall be considered to 
        be expended for administrative expenses and shall be subject to 
        the limitation specified in section 680A(b)(2).
            ``(3) Definition.--In this subsection, the term `controlled 
        substance' has the meaning given the term in section 102 of the 
        Controlled Substances Act (21 U.S.C. 802).
    ``(b) Child Support Services and Referrals.--During each fiscal 
year for which an eligible entity receives a subgrant under section 
680A(a), such entity shall--
            ``(1) inform custodial parents in single-parent families 
        that participate in programs, projects, or services carried out 
        or provided under this subtitle about the availability of child 
        support services; and
            ``(2) refer eligible parents to the child support offices 
        of State and local governments.

``SEC. 690. OPERATIONAL RULES.

    ``(a) Religious Organizations Included as Nongovernmental 
Providers.--For any program carried out by the Federal Government, or 
by a State or local government under this subtitle, the government 
shall consider, on the same basis as other nongovernmental 
organizations, religious organizations to provide assistance under the 
program, so long as the program is implemented in a manner consistent 
with the Establishment Clause of the first amendment to the 
Constitution. Neither the Federal Government nor a State or local 
government receiving funds under this subtitle shall discriminate 
against an organization that provides assistance under, or applies to 
provide assistance under, this subtitle, on the basis that the 
organization has a religious character.
    ``(b) Religious Character and Independence.--
            ``(1) In general.--A religious organization that provides 
        assistance under a program described in subsection (a) shall 
        retain its religious character and control over the definition, 
        development, practice, and expression of its religious beliefs.
            ``(2) Additional safeguards.--Neither the Federal 
        Government nor a State or local government shall require a 
        religious organization--
                    ``(A) to alter its form of internal governance, 
                except (for purposes of administration of the community 
                services block grant program) as provided in section 
                681(c); or
                    ``(B) to remove religious art, icons, scripture, or 
                other symbols;
in order to be eligible to provide assistance under a program described 
in subsection (a).
    ``
            ``(3) Employment practices.--A religious organization's 
        exemption provided under section 702 of the Civil Rights Act of 
        1964 (42 U.S.C. 2000e-1) regarding employment practices shall 
        not be affected by its participation in, or receipt of funds 
        from, programs described in subsection (a).
    ``(c) Nondiscrimination Against Beneficiaries.--A religious 
organization providing assistance under any program described in 
subsection (a) shall not, in providing such assistance, discriminate 
against a program beneficiary or prospective program beneficiary on the 
basis of religion or religious belief.
    ``(d) Limitations on Use of Funds for Certain Purposes.--No funds 
provided directly to a religious organization to provide assistance 
under any program described in subsection (a) shall be expended for 
sectarian worship, instruction, or proselytization.
    ``(e) Fiscal Accountability.--
            ``(1) In general.--Except as provided in paragraph (2), any 
        religious organization providing assistance under any program 
        described in subsection (a) shall be subject to the same 
        regulations as other nongovernmental organizations to account 
        in accord with generally accepted accounting principles for the 
        use of such funds provided under such program.
            ``(2) Limited audit.--Such organization shall segregate 
        government funds provided under such program into a separate 
        account. Only the government funds shall be subject to audit by 
        the government.
    ``(f) Treatment of Eligible Entities and Other Intermediate 
Organizations.--If an eligible entity or other organization (referred 
to in this subsection as an `intermediate organization'), acting under 
a contract, or grant or other agreement, with the Federal Government or 
a State or local government, is given the authority under the contract 
or agreement to select nongovernmental organizations to provide 
assistance under the programs described in subsection (a), the 
intermediate organization shall have the same duties under this section 
as the government.

``SEC. 691. REGULATIONS AND TRANSITION PERIOD.

    ``(a) Transition Period.--The Secretary shall expeditiously 
announce a schedule for adopting any changes in regulation, procedure 
and reporting required by this subtitle and for the availability of 
Federal training for States and eligible entities, especially with 
respect to adopting the uniform administrative requirements, cost 
principles, and audit requirements described in section 676(b), which 
period may not extend further than 3 months prior to the start of the 
second fiscal year after the effective date of this subtitle and may 
include final adoption of new requirements prior to the final date of 
the period as determined by the Secretary to be appropriate.
    ``(b) Regulations.--The Secretary shall promulgate regulations 
implementing this subtitle, by administrative hearing open to the 
public including regulations regarding--
            ``(1) State and community action programs and plans 
        including the form and information required for State and 
        community action programs and plans;
            ``(2) State monitoring of eligible entities; and
            ``(3) reports to the Secretary described in section 687.
    ``(c) Guidance.--The Secretary shall promulgate guidance regarding 
State and community performance measurement systems including--
            ``(1) State management performance benchmarks.--The 
        Secretary, in consultation with community service network 
        organizations, shall promulgate State management performance 
        indicators which shall include information to be reported 
        concerning--
                    ``(A) States' timely obligation and distribution 
                and effective oversight of Federal funds;
                    ``(B) States' compliance with the requirements for 
                minimum skills of State personnel and compliance with 
                the uniform administrative requirements, cost 
                principles, and audit requirements described in section 
                676(b);
                    ``(C) States' effective management of the 
                activities funded under this subtitle; and
                    ``(D) the results of activities funded by the State 
                under section 680A(b).
            ``(2) Comprehensive analysis of poverty conditions.--The 
        Secretary shall provide guidance (including models) for 
        comprehensive community needs assessments described in section 
        680(a)(2)(C). The guidance shall include methods for preparing 
        an analysis of all poverty conditions affecting the community 
        and of local and regional assets for alleviating such 
        conditions; and
            ``(3) Such other guidance as may be required by this 
        subtitle.

``SEC. 692. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--There are authorized to be appropriated to carry 
out sections 671 through 691 of this subtitle $850,000,000 for each of 
fiscal years 2014 through 2018 and such sums as may be necessary for 
fiscal years 2019 through 2023.
    ``(b) There are authorized to be appropriated such sums as may be 
necessary to carry out section 693 for fiscal years 2014 through 2023.
    ``(c) Reservations by the Secretary.--Of the amounts appropriated 
under subsection (a) for each fiscal year, the Secretary shall 
reserve--
            ``(1) \1/2\ of 1 percent for carrying out section 677 
        (relating to grants to territories); and
            ``(2) 2 percent for activities authorized in section 683, 
        of which--
                    ``(A) not less than \1/2\ of the amount reserved by 
                the Secretary under this paragraph shall be awarded 
                through grants, contracts, or cooperative agreements 
                under section 683(c), to eligible entities, community 
                action agencies, and State and regional community 
                service network organizations, for the purpose of 
                carrying out activities described in section 
                683(a)(1)(A); and
                    ``(B) the remainder of the amount reserved under 
                this paragraph shall be distributed under section 
                683(a)(1)(B)(c) to States, eligible entities, other 
                community services network organizations, or other 
                entities, for the purpose of carrying out activities 
                described in section 683(a)(1)(B).

``SEC. 693. DISCRETIONARY COMMUNITY PROGRAMS.

    ``(a) Grants, Contracts, Arrangements, Loans, and Guarantees.--
            ``(1) In general.--The Secretary shall, from funds 
        appropriated under section 692(b), make grants, loans, or 
        guarantees to States and public agencies and private, nonprofit 
        organizations, or enter into contracts or jointly financed 
        cooperative arrangements with States and public agencies and 
        private, nonprofit organizations (and for-profit organizations, 
        to the extent specified in paragraph (2)(E)) for each of the 
        objectives described in paragraphs (2) through (4).
            ``(2) Community economic development.--
                    ``(A) Economic development activities.--The 
                Secretary shall make grants described in paragraph (1) 
                on a competitive basis to private, nonprofit 
                organizations that are community development 
                corporations to provide technical and financial 
                assistance for economic development activities designed 
                to address the economic needs of low-income individuals 
                and families by creating employment and business 
                development opportunities.
                    ``(B) Consultation.--The Secretary shall exercise 
                the authority provided under subparagraph (A) after 
                consultation with other relevant Federal officials.
                    ``(C) Governing boards.--For a community 
                development corporation to receive funds to carry out 
                this paragraph, the corporation shall be governed by a 
                board that shall consist of residents of the community 
                and business and civic leaders and shall have as a 
                principal purpose planning, developing, or managing 
                low-income housing or community development projects.
                    ``(D) Geographic distribution.--In making grants to 
                carry out this paragraph, the Secretary shall take into 
                consideration the geographic distribution of funding 
                among States and the relative proportion of funding 
                among rural and urban areas.
                    ``(E) Reservation.--Of the amounts made available 
                to carry out this paragraph, the Secretary may reserve 
                not more than 1 percent for each fiscal year to make 
                grants to private, nonprofit organizations or to enter 
                into contracts with private, nonprofit or for-profit 
                organizations to provide technical assistance to aid 
                community development corporations in developing or 
                implementing activities funded to carry out this 
                paragraph and to evaluate activities funded to carry 
                out this paragraph.
            ``(3) Rural community development activities.--The 
        Secretary shall provide the assistance described in paragraph 
        (1) for rural community development activities, which shall 
        include providing--
                    ``(A) grants to private, nonprofit corporations to 
                enable the corporations to provide assistance 
                concerning home repair to rural low-income families and 
                concerning planning and developing low-income rural 
                rental housing units; and
                    ``(B) grants to multistate, regional, private, 
                nonprofit organizations to enable the organizations to 
                provide training and technical assistance to small, 
                rural communities concerning meeting their community 
                facility needs.
            ``(4) Neighborhood innovation projects.--The Secretary 
        shall provide the assistance described in paragraph (1) for 
        neighborhood innovation projects, which shall include providing 
        grants to neighborhood-based private, nonprofit organizations 
        to test or assist in the development of new approaches or 
        methods that will aid in overcoming special problems identified 
        by communities or neighborhoods or otherwise assist in 
        furthering the purposes of this subtitle, and which may include 
        providing assistance for projects that are designed to serve 
        low-income individuals and families who are not being 
        effectively served by other programs.
    ``(b) Evaluation.--The Secretary shall require all activities 
receiving assistance under this section to be evaluated for their 
effectiveness. Funding for such evaluations shall be provided as a 
stated percentage of the assistance or through a separate grant awarded 
by the Secretary specifically for the purpose of evaluation of a 
particular activity or group of activities.
    ``(c) Annual Report.--The Secretary shall compile an annual report 
containing a summary of the evaluations required in subsection (b) and 
a listing of all activities assisted under this section. The Secretary 
shall annually submit the report to the Chairperson of the Committee on 
Education and the Workforce of the House of Representatives and the 
Chairperson of the Committee on Health, Education, Labor, and Pensions 
of the Senate.''.
                                 <all>